Sebi's Madhabi Puri confirms industry players' nod for disclosures needed before audit approval of RPTs

Sebi chairperson Madhabi Puri Buch

The Industry Standards Forum, a collaborative platform set up by capital market regulator Sebi, has approved the minimum required disclosures for listed companies before they seek shareholder nod for a Related-Party Transaction (RPT), Sebi chairperson Madhabi Puri Buch said on February 14 at an event in Mumbai.

The ISF has agreed on the minimum required disclosures for listed companies, before a RPT is taken up for approval by the Audit Committee as well as the shareholders.

"Governance is what drives trust in companies. Why emphasis on RPTs? It is our belief that in every decision made by its company, in almost every case, the objectives and interests of promoters and minority shareholders are aligned. The only place where there is a potential for divergence is RPTs," SEBI's Madhabi Puri said, stressing on the need for transparancy around RPTs.

Sebi's chairperson added that this aspect of a business is extremely crucial to our investors, so much so that the regulator considers it 'the number one item'.

"We never tell companies what to do or what not to do. Only thing we ask is that please disclose what you are doing," said Madhabi Puri, while speaking at the analysis portal launch in Mumbai.

Chairperson Madhabi Puri also launched a portal for tracking and analysing related-party transactions, which is the first and one-of-a-kind dedicated website.

The oversight on RPTs gets significant importance from institutional as well as foreign investors, said Sebi, adding that it gets a lot of queries around what the regulator has been doing on this front.

"The largest number of queries we get from institutional investors, including foreign investors, is questioning SEBI on what are we doing to create transparency around RPTs."

This is being updated.